Many Businesses Report a Healthy Summer

By JACK SHEA

Two months of warm, sunny weather and a modest but not overwhelming increase in visitors over last year combined to make a rosy end-of-season business report - at least by most accounts.

Heading into Labor Day weekend, some Island businesses are reporting gains of five to seven per cent over last year, while some retailers and restaurants had gains of 10 per cent or more.

The first 21 days of August were key to the season's success, business leaders say. "A five per cent increase is pretty good performance considering retail took a one per cent gain year over year into August," reasoned Paul Watts, senior vice president of the Bank of Martha's Vineyard. "I've noticed a jump in our transactions this month," he said.

June was strong compared with 2006; July Fourth weekend offset a mid-month slump and then the August bump provided the rest.

Wedding-related businesses are upbeat about the post-summer shoulder season, according to Nancy Gardella, executive director of the Martha's Vineyard Chamber of Commerce. "We did an informal survey of the wedding business and venues, caterers and wedding planners are booked through September and into October," she said.

Chris Scott, executive director of the Martha's Vineyard Preservation Trust, confirmed that bookings at the Whaling Church, Union Chapel and the Grange Hall in West Tisbury are up double digits for this year. The average wedding brings 150-250 people to the Island for a minimum of four days, he said.

Savvy retailers say the people who have done best are those who have traded in the traditional "open up and wait for tourists" business model for a more focused approach with a sharp eye on inventory and an ear for what sells. Lily Pulitzer wear is more important than snow globes.

Even the Steamship Authority is thinking about getting into merchandising.

In past decades, doing business more resembled shooting fish in a barrel than competing, particularly during the 1980s construction boom, and especially during the Clinton years in the 1990s.

But evidently not today or for the future. Economic statistics from the Martha's Vineyard Commission show 44 per cent more businesses compete for Island and visitor dollars than 20 years ago and there is a bit more balance between seasonal and year-round enterprises.

The Flying Horses carousel in Oak Bluffs is a classic example of a business that does not raise prices and operates at maximum capacity with a limited number of potential riders. "It's a finite business. We can't add more rides, we can't grow that business," Mr. Scott said. The answer has been to add carousel hats and T-shirts and a selection of kids books with carousel references.

Visitor-related business is still the biggest piece of the Island economic pie at 39 per cent for retail, food, lodging, real estate and entertainment, but the service sector, from insurance to refuse removal, now makes up 24 per cent of Island business. Construction is 17 per cent of Island commerce. In what may be a related trend, several restaurants opted recently to apply for year-round liquor licenses.

The message delivered this week by thoughtful businessmen is that Island tourist-based businesses need to understand that visitor saturation levels have been reached. The trick is learning how to earn more with only slightly more visitors in a very short season.

Improving business can take simple forms, including a customer-first mentality. One Edgartown retailer reportedly has been quietly adding up the number of precious downtown parking spots occupied by retailers rather than by their customers amid pleas by members of the business community for improved parking arrangements downtown.

Raising prices is not the answer, many say, citing the sarcastic Vineyard joke about visitors having to choose between two weeks in Europe or one week on the Vineyard. "A restaurant steak for $45?" asked one successful businessman. "I can't do that and if we just keep raising prices to cover revenue shortfalls, we will drive visitors away as well."

Chesca's in Edgartown and the Outermost Inn were cited as restaurants with menus for success. Said one longtime Island food professional: "If you look at restaurants like these, they are successful not because they offer everything under the sun but because of what they do with four or five staples like meat, chicken, fish and shellfish. They prepare, season and present the staples in attractive ways and in interesting combinations."

Mr. Watts said the Island presents many challenges to people in business.

"Some of my clients are maxed. They can't turn any more tables or increase prices anymore or they risk chasing business away. How do you make more money if you're maxed? I don't have the answer but the challenges include the expense of doing business and hiring people here. I firmly believe the Boston TV weathermen are so important. A Boston area forecast, good or bad, can result in a swing of 100 room bookings here. Business people ought to look at that," he said, noting that Vineyard weather is rarely similar to Boston weather.

Rob Douglas, chief executive officer at The Black Dog, credited experienced employees for a double-digit increase he is projecting for his food business this season. "We have a bunch of very good employees with three or four years under their belts in our food business. We have the benefit of year-round employment and we offer good salaries and benefits," he said.

It's been a mixed year for some retailers. "Some [in Edgartown] have done better than others but if you look at who's doing well, they are in touch with their customers," said Maggie White, president of the Edgartown Board of Trade. She cited Vineyard Vines and In the Pink as hot retail destinations.

Aboveground Records is a classic example of defining and redefining a retail business. Owner Mike Barnes has been operating the business for 13 years through major shifts in the music business with changing technology. "We saw it coming and shifted to become a collectible store nourishing independent artists. A lot of our customers come to us because the store that was like us in their home town has gone out of business," Mr. Barnes said.

When a New York Times story named the Aboveground T-shirt the hottest new commodity two years ago, Mr. Barnes had another defining moment. "Are we going to be a collectible music store or a T-shirt store? We decided that we are a music store. Look, our business is never going to be up again in the traditional business sense as the music business exists today. So we need to spend better. We have to focus on our music. We can compete well in the used and collectible music business. The T-shirt business helps out a lot as additional income. It helps us do what we do better but we can't lose time and focus from the music business to the hat and shirt business," he said.

At Alley's General Store in West Tisbury business is up 18 per cent year to date, pushed by an upgraded fresh produce section, a new selection of beach items and a wider array of toys, according to Mr. Scott, whose nonprofit trust owns the building and hires a management team to run the store.

Humorous marketing works too. Lorraine Parish, who owns a women's fashion and home design store in Vineyard Haven, is launching a Need More Nuts sale today to store up additional income for winter. This is her 29th season. "The truth works," she laughed.